Getting Past Going Broke, Part 1

Kevin Hogan

First the Not So Good News....

And then either in this article or next week I'll walk you through how to solve the problem for YOU. I can't fix the world, I can show you how to fix your own situation....

Let's jump right in to the CRACKS in the FOUNDATION POINT #1

FOUNDATION POINT 1 - People don't get what inflation is and how it is soooooo important to everything they think they will have and then will never end up with in their life.

Check this out first then I'll show you a three sentence definition of the two kinds of inflation....so you know forever what they are and what they mean to you.

One of the fascinating piece of replicated research is people's desire to have a 4% raise when there is inflation of 9% vs. a 1% cut in pay when inflation is zero.

It sounds cooler to tell the wife you got a 4% raise than that you "took a 1% cut in pay."

Ego.

Ego is always bigger than math.

Simple enough?

Let's take a quick 30-second look at some boring old numbers that are causing you to go broke.

Rearrange which of these you'd rather have...which ended up working best for you and your family.

This assumes you have a job where you get a "raise" each year instead of running your own show where you obviously control your own paycheck.

Inflation can mean a few things. One is that there is a rise in the numbers of pieces of paper called money that are then used to chase products and services. Typically this causes prices of "stuff" to go up (but not always) and prices going up is a kind of inflation too.

OK, let's check out a couple scenarios real quick....

Real quick check out a few quickie scenario's. Just fly by them...

A. You get a cut in pay by 1% while inflation is -2%.

B. You get no raise and there is 0% inflation.

C. Inflation is 2% and you get a 1% raise.

D. Inflation is 4.5% and you get a 3% raise.

E. Inflation is 9% and you get a 7% raise.

Let's say in each of these years, you did the same job, same performance. Everything is equal except what you got, and what the real rate of inflation in your house was for the year.

Which is what you want? Where did you get the shaft?

A. You made money! You ended up with more than you had the previous year. Inflation was down.

B. No inflation, no increase. You did your job you got paid. Not as good as A, but not terrible.

C. You got slapped in the face. You took a pay cut of 1%

D. You got slapped in the face twice. You took a pay cut of 1.5%

E. You got slapped in the face hard. You took a pay cut of 2%

But it sounds better to say, "Hey I got a 7% raise..." than it does, "I got a zero percent raise." The fact is that in all cases except the first, you did not make money. In "A" above, it looks like you took a cut in pay, but you actually made money in real life. Your employer was nice.

So we get that, right?

Now you know why you seem to be getting a "pay raise" but you really aren't. Simple enough.

Here's the real deal: You will always be given a raise that is about the same as inflation. If you're doing the same job you did last year, it wouldn't make any sense to give you a raise more than inflation.

OK, that's the first Foundation Point that matters a lot.

You work the same amount of money every year. This is the #1 PROBLEM you have.

You really need to be working for 2-3-4 TIMES what you earned last year.

We'll solve this later.

Turn the page for the next FOUNDATION POINT with important news about your 401K ...

Continue: Page | 1 | 2 | 3 | 4 |

Kevin Hogan
Network 3000 Publishing
3432 Denmark #108
Eagan, MN 55123
(612) 616-0732

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